#1
Which international organization provides financial assistance to countries facing balance of payments problems?
International Monetary Fund (IMF)
ExplanationIMF aids countries in financial distress to stabilize their economies
#2
What is the meaning of the term 'exchange rate' in international economics?
The rate at which a country's currency can be exchanged for another currency
ExplanationValue ratio between two currencies in international trade
#3
What is the concept of the Big Mac Index?
An index comparing the prices of a Big Mac burger across different countries to assess exchange rate misalignment
ExplanationInformal measure of exchange rate disparities using a common product
#4
What is the primary goal of the International Monetary Fund (IMF)?
To maintain a stable global financial system and prevent financial crises
ExplanationPromotion of global financial stability and crisis prevention
#5
Which economic theory suggests that a country should specialize in producing goods and services in which it has a comparative advantage?
Comparative Advantage
ExplanationEconomic theory advocating specialization based on relative efficiency
#6
What is the balance of payments?
The difference between total exports and total imports of a country
ExplanationMeasure of a country's economic transactions with the rest of the world
#7
What is the Purchasing Power Parity (PPP) theory?
A theory stating that exchange rates should move towards the rate that would equalize the prices of an identical basket of goods and services in any two countries
ExplanationExchange rate theory based on price equalization across countries
#8
Which economic indicator measures the average prices of goods and services in a country over a specific period?
Consumer Price Index (CPI)
ExplanationMeasure of inflation by tracking changes in average prices
#9
What is the purpose of the Special Drawing Right (SDR) in the International Monetary Fund (IMF)?
To provide a supplementary international reserve asset
ExplanationReserve asset to supplement member countries' official reserves
#10
What is the significance of the Phillips Curve in international macroeconomics?
It illustrates the relationship between inflation and unemployment
ExplanationGraphical representation of the inverse relationship between inflation and unemployment
#11
What is the Triffin dilemma in international economics?
The conflict of interest between national and international objectives of a reserve currency
ExplanationChallenge of maintaining a global reserve currency with conflicting goals
#12
What is the Marshall-Lerner condition in international trade?
A condition for a country's trade balance to improve after a currency depreciation
ExplanationCriteria for currency devaluation to positively impact trade balance
#13
What is the concept of the Impossible Trinity in international finance?
The idea that it is impossible for a country to have independent monetary policy, free capital movement, and a fixed foreign exchange rate simultaneously
ExplanationConstraints on achieving three key economic goals simultaneously
#14
What does the term 'currency peg' mean in the context of international finance?
A country's commitment to maintain its currency's value relative to another currency or a basket of currencies
ExplanationFixed exchange rate commitment to another currency or basket
#15
What is the Plaza Accord?
An agreement to stabilize exchange rates among major industrialized countries
ExplanationAccord to coordinate exchange rate stability among major economies